Changes in gene transcription are important in the progression of cancer, in most other human diseases, and in the aging process, as well as in the development of multicellular organisms at all stages. A detailed understanding of how such changes are regulated is the basis of both diagnostic tools and intervention strategies. Further advancement holds the promise of novel approaches, and of increased effectiveness of current approaches. Importantly, many questions remain about the fundamental processes involved. Tools available in Drosophila make it possible to study mechanisms of action and interaction in detail, in a true in vivo context. This proposal is to study mechanisms of chromatin-based gene regulation involving Polycomb- response elements and an insulator, recently discovered in the well-characterized Drosophila gene even skipped. These studies will address basic questions of how transcriptional memory and chromosome organization work in 3 dimensions in the nucleus. They will provide a clearer understanding of how epigenetic mechanisms propagate alternative transcriptional states, and the importance of long-range regulatory interactions between distant genomic regions. In mammals, Polycomb Group proteins are involved in maintenance of the stem cell niche, and in oncogenesis. Therefore, these studies will have direct applications to research on human diseases. The Specific Aims are: 1) to investigate mechanisms of maintenance of repression and activation by Polycomb- response elements from the even-skipped locus 2) to study mechanisms of long-range insulator-mediated enhancer-promoter communication, and 3) to test the properties and functions of even-skipped Polycomb-response elements and the insulator in their native context.